American Airlines drops its Gogo inflight internet suit

Only 10 days after filing, American Airlines has dropped its lawsuit asking a judge to get involved in a contract dispute with Gogo, which sells in-flight internet connectivity.

Gogo's stock shares were up 10% an hour after the news today that American has dropped the declaratory judgment action. But its share price remained only $11, as of publication time, down from its $13.89 price prior to the suit.

There was no word on the likelihood that the airline would remain a customer of Chicago-based Gogo. The airline considers competitor ViaSat's connectivity service to offer "a material improvement" over Gogo's early-generation air-to-ground service, "with respect to a portion of American’s fleet, representing about 200 aircraft."

UPDATE 1500 ET: Airline expert Seth Miller looked at filings around the case to figure out why the lawsuit was filed in the first place. He blogged:

"Essentially it seems that letters crossed in the ether (or on the ground I suppose; I don’t know if they use email or a paper solution for this sort of communication). And that the delay in Gogo acknowledging and responding caused the situation to go public...."

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In light of the suit being dropped, Miller notes via Twitter:

"This doesn't end the efforts by AA to get out of the contract; it just ends the need for a judge to be involved."